As a Mortgage Broker in Coventry, we often see that First Time Buyers struggle to get onto the property ladder. Sometimes it’s down to personal circumstances, however, we commonly see that first time applicants don’t actually know how much to put down for their deposit and how much they should save for. If you apply for a mortgage and get turned away due to not having enough deposit, you could potentially damage your credit score.
As a First Time Buyer mortgage applicant, it can be hard to wrap your head around all of the different things that you need to prepare for a mortgage. To give you an insight into some of the costs that come with a mortgage, we have collected some data based on First Time Buyer mortgage applications in Coventry. We chose to cover the average deposit amount, purchase price and loan-to-value percentage (LTV%).
When looking at the data that we collected, Coventry and Birmingham are very similar. For example, the average deposit for First Time Buyers in Coventry is £35,200. In Birmingham, the average is £32,200. There is no significant difference between the two average deposits.
This is around a 17% deposit average, which is quite a lot when compared to other areas around the UK. You have to remember though that this is an average and doesn’t represent every single house in Coventry.
More often than not, First Time Buyers receive help from family members or friends through a gifted deposit. So, even if you feel that £35,200 is a big deposit, you may get a part of that through the aid of a gifted deposit. If you are lucky enough to receive a gifted deposit, you now have your portion of your deposit plus whatever you have been gifted.
This can often push the applicant’s deposit above the minimum that the lender wants, boosting your chances of being accepted greatly. In turn, this may then allow the applicant to access a lower-to-value panel where they will be more competitive deals and lower interest rates.
Despite the average deposit amount for First Time Buyers in Coventry being very similar to Birmingham, it isn’t the same for the average purchase. Coventry’s average purchase price for First Time Buyers is £205,720 and Birmingham’s is £181,000, with the county average being £193,000. This shows that it is more expensive to live in Coventry than in Birmingham.
When comparing this to somewhere in the north of England, for example in Yorkshire the average is £157,000. So, according to our data, it’s more expensive to live in the West Midlands over Yorkshire.
Once you have your deposit amount and your purchase price, you can work out your loan-to-value percentage. A lower loan-to-value percentage normally comes with more competitive rates.
In Coventry, the average loan-to-value percentage sits at 83%. Birmingham has a slightly better loan-to-value, but then again, they are very close which doesn’t make that much difference.
This infographic below shows you how to work out your loan-to-value percentage:
Coventry is a big city with a large variety of housing choices available. As a First Time Buyer in Coventry, you should have no problem with finding a property that is right for you. Coventry could be the perfect location for you to start your mortgage journey.
If you are wanting to take that first step onto the property ladder but are wanting some help and guidance, it may be within your best interests to approach a Mortgage Broker in Coventry, like us.